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New Supreme Court Ruling Sees Inventor Walk Away With £2 million in Compensation.

In February of this year the Supreme Court heard the case of Shank v. Unilever PLC and Other. Patrick Green QC appeared on behalf of the appellant whilst Daniel Alexander QC on behalf of the respondent. The judgement was given on the 23rd October 2019 and dealt with the application for compensation under S.40 of the Patents Act 1977.

The Supreme Court had to consider the circumstances in which compensation should be paid and how to put a figure on such compensation. In 1984 Unilever plc filed for UK patent entitled “Devices for use in chemical test procedures” and professor shank was named as the inventor. Unilever also filed for patent in a number of other countries which were all granted. It is on the basis of these patents that professor shank applied for compensation.

Professor shank was employed by CRL who employed all Unilever UK-Based research staff. His Salary was £18,000 plus a car. The aim of his employment was to ‘develop biosensors for use in process control and process engineering.’

On a visit to Cranfield University in 1982 Shank learned of the research into using biosensors for monitoring Diabetes. This piqued Shanks interest and on the 1st August 1982 issued a report called “Report on new opportunities afforded by electronic sensors” In the process of his report he identified new product opportunities.

In October 1982 Professor Shank produced his first prototype of his invention using his daughters toy microscope and bulldog clips. The product he produced is currently known as the ECFD (Electrochemical Capillary Device.)

Professor Shanks current employer CRL sold his inventions to Unilever PLC for £100 who subsequently assigned the rights to Unilever NV so it could be used anywhere in the world.

Whilst Unilever were not interested in breaking in to the world of Diabetes glucose testing, by the late 1990’s diabetes testing was at an all-time high. Most of the glucose testing strips that were being invented incorporated professor Shanks ECFD technology. It became a vital part of the testing procedure and because of this companies were willing to pay to use the patent.

Unilever had no experience in licensing and due to this had very limited resources for applying the licences. In the end though Unilever produced seven licences of the Shanks patents. The price paid for these licences totalled £ 20.3 million.

In 2001 the Shanks Patent were sold to IMI (Inverness Medical Innovation) for approx. £5 million. Due to other patents being sold at the same time (known as the “birch Patents) the new benefit from the Shanks patents totalled approximately £24 million.

In 2006 Shanks applied for compensation. By 2013 the case had been heard and it was decided that Professor Shank was not entitled to compensation due to his inventions falling short of being ‘outstanding’. In 2014 his case was heard in the High Court. His appeal was dismissed and the same outcome as the original judge was made. Professor Shank was not going to let this go and in 2017 his case was heard in the Court of Appeal. Again his appeal was dismissed on the same grounds.

On Taking the case to the Supreme Court, the court was focused in particular to S.40(1) of the Patents Act 1977 which states “where it appears to the court although controller on an application made by an employee within the prescribed period that the employee has made intervention belonging to the employer for which a patent has been granted, that the patent is…. of outstanding benefit the employer and that by reason of those fact it is just that the employee should be awarded compensation…”

The court also had to decide what was meant by the term ‘Outstanding’. It also looked into the Employer’s undertaking, the size and nature of the employer’s undertaking, time value of money, tax and the assessment of benefit and fair share. After hearing from both sides the court concluded that the shanks patents were of outstanding benefit to Unilever and CRL and because of this Professor Shanks appeal succeeded and was awarded compensation of £2 million.

I think it is only fair that even if you are employed to do a job which results in a new invention, you should be compensated for that effort. If we continue to let companies profit from others the world will be taken over by them and the problem is then when they crash it is the little people at the bottom of the tree that are effected.

In my opinion the Supreme Court came to a fair conclusion, the invention created by Professor Shank has changed the life of millions worldwide. I know this first hand, being a type one diabetic since the age of 6, I know the difference the invention has made. So for that I applaud you Professor Shank.

Read the full judgement of the case HERE.

Written By: Victoria-Jayne Scholes

Image Credit to The Guardian

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